"The Roles of Interaction and Proximity for Innovation by Irish High-Technology Businesses: Policy Implications"

qec

Is Irish innovation policy working? Evidence from high-technology businesses

In the last decade Irish innovation policy has been focused on Higher Education Institutions (HEIs). This paper explores the effects of HEIs, in the context of interaction with other interaction agents, on the innovation output of Irish high-technology businesses. Based on a survey of 184 businesses in the Chemical and Pharmaceutical, Information and Communications Technology and Engineering and Electronic Devices sectors, the paper estimates the importance of in-house R&D activity and external interaction with HEIs, support agencies and other businesses for product and process innovation. A key finding is that the greater the frequency of direct interaction with HEIs the lower the probability of both product and process innovation in these businesses. There is some evidence of a positive indirect HEI effect, through complementarities of interactions with suppliers and support agencies. However, while external interaction is important for innovation output, there is little evidence that geographical proximity matters. These findings have important implications for Irish innovation policy. Last year’s Strategy for Science, Technology and Innovation: 2006 to 2013 committed an additional €1.88 billion for research and commercialisation programmes in HEIs. The econometric results presented suggest that this substantial public investment in HEIs may have a disappointing, and perhaps even a negative, effect on the innovation output of Irish business, thus undermining future Irish prosperity. In addition, the absence of evidence supporting the existence of Irish clusters and networks for innovation suggests that policymakers long-standing support for these have been misguided. The paper concludes by advocating that innovation is a business rather than a technological phenomenon and argues for a changed role for HEIs to one of responding to innovative businesses

The roles of interaction and proximity for innovation by Irish high-technology businesses: policy implications

This paper presents new survey-based evidence on the increasingly topical question of what drives innovation in Irish high-technology businesses. The extraordinary performance of the Irish economy since the 1990s has been inextricably linked to highly successful foreign-owned businesses, in sectors such as pharmaceuticals, electronics and computers (Gallagher, Doyle and O’Leary, 2002). It might be expected that innovation in these multi-nationals is largely sourced in other group companies located abroad. It is therefore pertinent to ask, in the context of the recent policy recommendations of the Enterprise Strategy Group (ESG) (2004), the extent to which these Irish subsidiaries source innovation in Ireland. This may be through their own research and development efforts and/or through interaction for the purposes of promoting innovation with other locally or regionally based businesses, Third Level Colleges and innovation support agencies, such as IDA Ireland and Enterprise Ireland. Moreover, it may be equally important to ask, in the context of the long-standing emphasis on improved performance of indigenous industry, whether indigenous high-technology businesses interact locally or regionally in order to promote innovation. Beginning with Culliton (1992) and continuing to the present, through, for example, Forfás (2004a) and the ESG (2004), Irish industrial policy has consistently promoted and supported clusters and networks. In recent years substantial State funding has also been devoted to research and development. The National Development Plan 2000-2006 (2000) allocated €2.5 billion and the government established Science Foundation Ireland. The ESG (2004) has proposed further State investment in research and development as well as new initiatives including building enterprise capability, funding collaboration between industry and Irish Third Level Colleges, introducing tax credits for research and development. There is a consensus in the Irish, and indeed the European, policy community that developing innovation through clusters and networks will be important for future Irish and European competitiveness (Bergin et al., 2003; Forfás, 2003; National Competitiveness Council, 2003; European Commission, 2003). By presenting survey based evidence on the sources of innovation in Irish high-technology industry, this paper makes an important contribution to this debate. It begins by outlining the design of the survey instrument and then presents the results. The policy implications of the results are then discussed

The role of external interaction for innovation in Irish high-technology businesses

There is growing empirical evidence that external interaction is an important source of knowledge for business innovation. This paper contributes to the innovation literature by using new measures of interaction to explore the relative importance of external interaction for innovation in Irish high-technology businesses. Based on survey data, the paper finds that external interaction increases the probability of product and process innovation, but the effect is inconsistent across all external interaction agents. Interaction along the supply chain has a positive effect on innovation, and interaction with competitors has an insignificant effect on innovation output. Notably, the paper finds that interaction with higher education institutions has a negative effect on the probability of product and process innovation

External interaction, innovation and productivity: an application of the innovation value chain to Ireland

This paper analyses the innovation value chain for the Irish Community Innovation Survey (CIS): 2004-2006. In estimating innovation and productivity simultaneously, it extends the CDM methodology to include a range of external knowledge sources. Feedback effects are found to be vital, with more productive firms being more innovative and vice versa. External knowledge sources affect the innovation decision but not innovation performance, thus pointing to the primacy of internal processes for the crucial task of knowledge exploitation. There is evidence of dichotomous knowledge sourcing in Ireland, with some firms sourcing from market and others, especially high-technology businesses, from non-market agents.

The effects of geography on innovation in small to medium sized enterprises in the South-East and South-West of Ireland

This paper analyses the effects of geography on innovation by small and medium sized enterprises in the South-West and South-East regions of Ireland. Using an augmented innovation production function it estimates, both directly and indirectly, the effects of interaction with geographically proximate external agents and agglomeration economies on product and process innovation in these enterprises. The findings question the premise that geography matters for innovation in the Irish case. There is little evidence that local/regional interaction is more important for innovation and the close availability of a skilled labour pool and a range of urbanization indicators have no effect

VUV laser-induced plasma spectroscopy for low level sulphur detection in steel

When a short, high energy pulse of laser light is focused onto a solid target a high density, high temperature plasma is formed. This plasma emits radiation across a wide spectral range, from the x-ray to the infra-red. In this thesis, a variant of the well-established spectroscopic technique known as Laser-Induced Plasma Spectroscopy (LIPS) is used in order to more sensitively quantify sulphur content in steels. LlPS is a well-established method for both quantitative and qualitative analysls of solids, liqurds and gases A particular problem exists with the elemental characterisation of the light elements (2 < 20) including sulphur in that the strongest resonant emission lines from these elements lie in the VUV part of the spectrum. In this thesis, the VUV region of the spectrum has been exploited using a spatially-resolved approach which has proved to be superior to the more conventional time-resolved ultraviolet and visible LlPS experiments Spectral surveys of the VUV region have been conducted in order to isolate interference-free sulphur emission lines A number of optimisation studies have been made in order to improve the signal to standard deviation ratro in the characteristic background continuum emission. These included modification of the laser pulse energy, power density, lens focuslng type (cylindrical and spherrcal) and ambient gas type & pressure. As a result of these experiments, optimum conditions in which to construct callbration curves were found. Steel targets of certified sulphur concentration in the range 27 - 3800 pprn were used in the construction of these calibration functions. The sensitivrty of the LlPS technique has been improved on substantially with an ultimate detection limit of 1.7 +- 0.1 ppm achieved using the emission features of the S V emission line at 78.65 nm

A study of killer yeast activity against the opportunistic pathogen candida albicans

Based on the selective toxicity of yeast killer toxins towards other yeasts, a search was mounted for pharmacologically active proteins effective against Candida albicans and Candida glabrata. the principal aetiologlcal agents of vaginal candidosis. Of the twenty killer yeasts screened, only Williopsls mrakii LKB169 and NCYC500 displayed strong anti-Candida activity and were selected for further study. Unfortunately both yeasts proved unstable following serial subculture on agar slants. A secretion mutant derived from LKB169 (denoted LKB169A) lacked antimicrobial activity against both _C albicans and Saccharomyces cerevislae but retained activity against £ glabrata. A working hypothesis proposing the existence of multiple toxins from W mrakii was further investigated. A triplet bioassay using _C albicans A72, _C glabrata NCYC388 and cerevislae NCYC1006 was developed to differentiate toxins from W mrakii. Based on differences in thermal decay, sensitivity to papain and specificity of action, three distinct protein toxins from W mrakii LKB169 were identified and designated KA, KG and RS. Toxin multiplicity was substantiated for strain NCYG500 also; production was characterized by an early loss of antimicrobial activity against C albicans with a concurrent reversal in the ratio of the activity against C glabrata to the activity against S cerevislae. In general toxins from strain NCYC500 were more stable than those from LKB169. pH was identified as an important factor in the thermostability of Williopsls toxins. For example, the KG toxin from W mrakii LKB169 retained full activity against C glabrata after boiling for 10 minutes at pH 4.0; however, at pH 4.5 biological activity decayed at 37°C. Williopsls toxins may have therapeutic potential in vaginal candidosis where the low pH favours activity. In this regard it is encouraging that a secreted acid proteinase from C albicans did not hydrolpse the Williopsls toxins jLn vitro

The Roles of R&D and networking for innovation by Irish and foreign-owned firms: evidence from the Irish CIS 2006-08

This paper provides an empirical test of Cohen and Levinthal’s (1990) hypothesis that undertaking R&D and collaborating with external networks together enhance the probability that firms engage in product and process innovation. Following Doran, Jordan and O’Leary (2013) we test this hypothesis separately for Irish and foreign-owned firms based in Ireland using data from the Irish Community Innovation Survey 2006-08. In order to control for potential endogeneity of the external networking variables a two-step procedure is used with predicted probabilities used as instruments in the estimated production functions. The results suggest that Irish-owned firms which engage in external networks with public knowledge sources while simultaneously undertaking R&D are more likely to innovate than firms which perform these two activities individually. However, Irish-owned firms which engage in backward networking for product and forward networking for process innovation while also undertaking R&D are less likely to be innovative, perhaps suggesting a substitution effect. These results for Irish-owned firms provide some support for Cohen and Levinthal’s (1990) hypothesis. However, foreign-owned firms seems to be largely self-contained, relying exclusively on intramural R&D for innovation as the external networking variables, both individually and when interacted with R&D, have no effect on innovation likelihood